Risk Assessment

Regulatory Risks: Chinese regulators have warned against "irrational competition," and further intervention could impact business models.
Market Volatility: The ongoing price war is a major driver of stock price volatility for Meituan and its competitors.
Sustainability of Business Model: The heavy reliance on subsidies to gain market share raises long-term profitability concerns.
Labor Controversies: JD.com's use of rider welfare as a PR angle against Meituan could lead to reputational damage or regulatory scrutiny.

Key Indicators

The intensity and duration of the price war, particularly subsidy levels from Meituan and JD.com, will dictate near-term profitability.
Regulatory statements or actions regarding market competition in the food delivery sector are critical leading indicators.
The performance of Meituan's overseas ventures, such as Keeta in Saudi Arabia and its planned expansion in Brazil, will be key indicators for future growth drivers.

Regional Perspective

In China, Meituan's profit plunge highlights the cutthroat nature of its domestic food delivery market. The company's aggressive strategy to defend its turf against JD.com's entry has led to substantial financial strain. However, this intense domestic competition is also driving Meituan to seek growth opportunities abroad, with successful expansion in Hong Kong and planned investments in the Middle East and Latin America, notably Brazil.

Immediate Implications

Meituan faces continued pressure on profitability in the short term as it navigates the end of the price war, potentially impacting its ability to invest in new initiatives.
Investors may find opportunities in Meituan's stock given its significant price drop, provided they have a long-term view on market share dominance and the company's substantial cash reserves.
The agreement to cease "disorderly competition" suggests a potential stabilization of market dynamics, but the underlying competitive intensity remains high.

What to Watch

Monitoring Meituan's, JD.com's, and Alibaba's official statements on pricing strategies and subsidy levels post-August regulatory intervention.
Tracking any further regulatory actions or guidance from Chinese authorities concerning fair competition in the platform economy.
Observing the growth and market penetration of Meituan's overseas delivery platforms, particularly Keeta in Saudi Arabia and future ventures in Brazil and other Middle Eastern markets.